#THE DIRECT TAX VIVAD SE VISHWAS ACT, 2020 
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##ARRANGEMENT OF SECTIONS 

Last Updated: 29-6-2021 
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SECTIONS 

1. Short title. 
2. Definitions. 
3. Amount payable by declarant. 
4. Filing of declaration and particulars to be furnished. 
5. Time and manner of payment. 
6. Immunity from initiation of proceedings in respect of offence and imposition of penalty in certain 
cases. 
7. No refund of amount paid. 
8. No benefit, concession or immunity to declarant. 
9. Act not to apply in certain cases. 
10. Power of Board to issue directions, etc. 
11. Power to remove difficulties. 
12. Power to make rules. 

 
 
#THE DIRECT TAX VIVAD SE VISHWAS ACT, 2020 

##ACT NO. 3 OF 2020 

[17th March, 2020.] 

An Act  to  provide  for  resolution  of  disputed  tax  and  for  matters  connected  therewith  or 
incidental thereto. 

BE it enacted by Parliament in the Seventy-first Year of the Republic of India as follows:— 

1. **Short title.**—This Act may be called the Direct Tax Vivad se Vishwas Act, 2020. 

2. **Definitions.**—(1) In this Act, unless the context otherwise requires,— 

  ‘(a) “appellant” means— 

     (i) a person in whose case an appeal or a writ petition or special leave petition has been filed 
either  by  him  or  by  the  income-tax  authority  or  by  both,  before  an  appellate  forum  and  such 
appeal or petition is pending as on the specified date; 

     (ii) a person in whose case an order has been passed by the Assessing Officer, or an order has 
been passed by the Commissioner (Appeals) or the Income Tax Appellate Tribunal in an appeal, 
or by the High Court in a writ petition, on or before the specified date, and the time for filing any 
appeal or special leave petition against such order by that person has not expired as on that date; 

     (iii) a person who has filed his objections before the Dispute Resolution Panel under section 
144C of the Income-tax Act, 1961 (43 of 1961) and the Dispute Resolution Panel has not issued 
any direction on or before the specified date; 

     (iv) a  person  in  whose  case  the  Dispute  Resolution  Panel  has  issued  direction  under 
sub-section (5) of section 144C of the Income-tax Act and the Assessing Officer has not passed 
any order under sub-section (13) of that section on or before the specified date; 

     (v) a person who has filed an application for revision under section 264 of the Income-tax Act 
and such application is pending as on the specified date;”; 

*Explanation.*—For the removal of doubts, it is hereby clarified that the expression 
“appellant” shall not include and shall be deemed never to have been included a person in whose 
case a writ petition or special leave petition or any other proceeding has been filed either by him 
or by the income-tax authority or by both before an appellate forum, arising out of an order of the 
Settlement Commission under Chapter XIX-A of the Income-tax Act, and such petition or appeal 
is either pending or is disposed of.

  (b) “appellate forum” means the Supreme Court or the High Court or the Income Tax Appellate 
Tribunal or the Commissioner (Appeals); 

  (c) “declarant” means a person who files declaration under section 4; 

  (d) “declaration” means the declaration filed under section 4; 

  (e) “designated authority” means an officer not below the rank of a Commissioner of Income-tax 
notified by the Principal Chief Commissioner for the purposes of this Act; 

  (f) “disputed  fee”  means  the  fee  determined  under  the  provisions  of  the  Income-tax  Act,  1961 
(43 of 1961) in respect of which appeal has been filed by the appellant; 

  (g) “disputed income”, in relation to an assessment year, means the whole or so much of the total 
income as is relatable to the disputed tax; 

  (h) “disputed  interest”  means  the  interest  determined  in  any  case  under  the  provisions  of  the 
Income-tax Act, 1961 (43 of 1961), where— 

     (i) such interest is not charged or chargeable on disputed tax; 

     (ii) an appeal has been filed by the appellant in respect of such interest; 

  (i) “disputed  penalty”  means  the  penalty  determined  in  any  case  under  the  provisions  of  the 
Income-tax Act, 1961 (43 of 1961),  where— 

     (i) such penalty is not levied or leviable in respect of disputed income or disputed tax, as the 
case may be; 

     (ii) an appeal has been filed by the appellant in respect of such penalty; 

  (j) “disputed tax”, in relation to an assessment year or financial year, as the case may be, means 
the income-tax, including surcharge and cess (hereafter in this clause referred to as the amount of tax) 
payable by the appellant under the provisions of the Income-tax Act, 1961 (43 of 1961),  as computed 
hereunder:— 

     (A) in a case where any appeal, writ petition or special leave petition is pending before the 
appellate forum as on the specified date, the amount of tax that is payable by the appellant if such 
appeal or writ petition or special leave petition was to be decided against him; 

     (B) in a case where an order in an appeal or in writ petition has been passed by the appellate 
forum  on  or  before  the  specified  date,  and  the  time  for  filing  appeal  or  special  leave  petition 
against such order has not expired as on that date, the amount of tax payable by the appellant after 
giving effect to the order so passed; 

     (C) in  a  case  where  the  order  has  been  passed  by  the  Assessing  Officer  on  or  before  the 
specified date, and the time for filing appeal against such order has not expired as on that date, the 
amount of tax payable by the appellant in accordance with such order; 

     (D) in a case where objection filed by the appellant is pending before the Dispute Resolution 
Panel  under  section  144C  of  the  Income-tax  Act  as  on  the  specified  date,  the  amount  of  tax 
payable by the appellant if the Dispute Resolution Panel was to confirm the variation proposed in 
the draft order; 

     (E) in a case where Dispute Resolution Panel has issued any direction under sub-section (5) 
of section 144C of the Income-tax Act and the Assessing Officer has not passed the order under 
sub-section (13) of that section on or before the specified date, the amount of tax payable by the 
appellant  as  per  the  assessment  order  to  be  passed  by  the  Assessing  Officer  under  sub-section 
(13) thereof; 

     (F) in  a  case  where  an  application  for  revision  under  section  264  of  the  Income-tax  Act  is 
pending as on the specified date, the amount of tax payable by the appellant if such application 
for revision was not to be accepted: 

  Provided  that  in  a  case  where  Commissioner  (Appeals)  has  issued  notice  of  enhancement 
under section 251 of the Income-tax Act on or before the specified date, the disputed tax shall be 
increased  by  the  amount  of  tax  pertaining  to  issues  for  which  notice  of  enhancement  has  been 
issued: 

  Provided further that in a case where the dispute in relation to an assessment year relates to 
reduction of tax credit under section 115JAA or section 115D of the Income-tax Act or any loss 
or  depreciation  computed  thereunder,  the  appellant  shall  have  an  option  either  to  include  the 
amount of tax related to such tax credit or loss or depreciation in the amount of disputed tax, or to 
carry forward the reduced tax credit or loss or depreciation, in such manner as may be prescribed. 

  *Explanation.*—For  the  removal  of  doubts,  it  is  hereby  clarified  that  the  expression 
“disputed tax”, in relation to an assessment year or financial year, as the case may be, shall not 
include and shall be deemed never to have been included any sum payable either by way of tax, 
penalty or interest pursuant to an order passed by the Settlement Commission under Chapter XIX-
A of the Income-tax Act.

(k) “Income-tax Act” means the Income-tax Act, 1961 (43 of 1961); 

(l) “last  date”  means  such  date  as  may  be  notified  by  the  Central  Government  in  the  Official 
Gazette; 

(m) “prescribed” means prescribed by rules made under this Act; 

(n) “specified date” means the 31st day of January, 2020; 

(o) “tax arrear” means,— 

  (i) the aggregate amount of disputed tax, interest chargeable or charged on such disputed tax, 
and penalty leviable or levied on such disputed tax; or 

  (ii) disputed interest; or 

  (iii) disputed penalty; or 

  (iv) disputed fee, 

as determined under the provisions of the Income-tax Act. 

*Explanation.*—For  the  removal  of  doubts,  it  is  hereby  clarified  that  the  expression  “tax 
arrear” shall not include and shall be deemed never to have been included any sum payable either 
by  way  of  tax,  penalty  or  interest  pursuant  to  an  order  passed  by  the  Settlement  Commission 
under Chapter XIX-A of the Income-tax Act.

(2) The words and expressions used herein and not defined but defined in the Income-tax Act shall 
have the meanings respectively assigned to them in that Act. 

3. **Amount payable by declarant.**—Subject  to  the  provisions  of  this  Act,  where  a  declarant  files 
under the provisions of this Act on or before the such date as may be notified, a  declaration  to  the 
designated  authority  in  accordance  with  the  provisions  of  section  4  in  respect  of  tax  arrear,  then, 
notwithstanding anything contained in the Income-tax Act or any other law for the time being in force, the 
amount payable by the declarant under this Act shall be as under, namely:— 

| SI. NO | Nature of tax arrear. | Amount  payable  under | Amount  payable  under 
| | | this Act on or before the | this Act on or after the |
| | | 31st day of December, | 1st  day  of  January, |
| | | 2020  or  such  later  date | 2021 or such later date |
| | | as may be notified | as may be notified but on or before the last date. |
| (a) | where the tax arrear is the aggregate amount of disputed tax, interest chargeable or charged on such disputed tax and penalty leviable or levied on such disputed tax. | amount of the disputed tax. | the aggregate of the amount of disputed tax and ten per cent. of disputed tax: provided  that  where the  ten  per  cent.  of disputed  tax  exceeds the aggregate amount of interest chargeable or  charged  on  such disputed tax and penalty leviable  or levied on such disputed tax, the excess shall be ignored for the purpose of computation of amount payable under this Act . |
| (b) | where  the  tax  arrear  includes  the tax, interest  or  penalty  determined in  any  assessment  on  the  basis  of search under section 132 or section 132A of the Income-tax Act. | the aggregate of the amount of disputed tax and twenty-five per cent. of the disputed tax: provided that where the twenty-five per cent. of disputed tax exceeds the aggregate  amount  of interest  chargeable  or charged on such disputed tax and penalty leviable  or  levied  on such  disputed  tax,  the excess  shall  be  ignored for the  purpose  of computation  of  amount payable under this Act. | the  aggregate  of  the amount  of  disputed tax and thirty-five per cent. of disputed tax: provided  that  where the  thirty-  five  per cent.  of  disputed  tax exceeds the aggregate amount  of interest chargeable or charged on such disputed tax and penalty leviable  or  levied  on such disputed tax, the excess shall be ignored for the purpose of computation of amount payable. |
| (c) | where the tax arrear relates to disputed interest or disputed penalty or disputed fee. | twenty-five per cent. of disputed interest or disputed penalty or disputed fee. | thirty per cent. of disputed interest or disputed penalty or disputed fee: |

  Provided  that  in  a  case  where  an  appeal  or  writ  petition  or  special  leave  petition  is  filed  by  the 
income-tax authority on any issue before the appellate forum, the amount payable shall be one-half of the 
amount in the Table above calculated on such issue, in such manner as may be prescribed: 

  Provided  further  that  in  a  case  where  an  appeal  is  filed  before  the  Commissioner  (Appeals)  or 
objections  is  filed  before  the  Dispute  Resolution  Panel  by  the  appellant  on  any  issue  on  which  he  has 
already got a decision in his favour from the Income Tax Appellate Tribunal (where the decision on such 
issue is not reversed by the High Court or the Supreme Court) or the High Court (where the decision on 
such issue is not reversed by the Supreme Court), the amount payable shall be one-half of the amount in 
the Table above calculated on such issue, in such manner as may be prescribed: 

  Provided also that in a case where an appeal is filed by the appellant on any issue before the Income 
Tax Appellate Tribunal on which he has already got a decision in his favour from the High Court (where 
the decision on such issue is not reversed by the Supreme Court), the amount payable shall be one-half of 
the amount in the Table above calculated on such issue, in such manner as may be prescribed. 

4. **Filing of declaration and particulars to be furnished.**—(1) The declaration referred to in section 
3 shall be filed by the declarant before the designated authority in such form and verified in such manner 
as may be prescribed. 

  (2) Upon the filing the declaration, any appeal pending before the Income Tax Appellate Tribunal or 
Commissioner  (Appeals),  in  respect  of  the  disputed  income  or  disputed  interest  or  disputed  penalty  or 
disputed fee and tax arrear shall be deemed to have been withdrawn from the date on which certificate 
under sub-section (1) of section 5 is issued by the designated authority. 

  (3) Where the declarant has filed any appeal before the appellate forum or any writ petition before the 
High Court or the Supreme Court against any order in respect of tax arrear, he shall withdraw such appeal 
or writ petition with the leave of the Court wherever required after issuance of certificate under 
sub-section (1) of section 5 and furnish proof of such withdrawal alongwith the intimation of payment to 
the designated authority under sub-section (2) of section 5. 

  (4) Where the declarant has initiated any proceeding for arbitration, conciliation or mediation, or has 
given any notice thereof under any law for the time being in force or under any agreement entered into by 
India with any other country or territory outside India whether for protection of investment or otherwise, 
he shall withdraw the claim, if any, in such proceedings or notice after issuance of certificate under 
sub-section (1) of section 5 and furnish proof of such withdrawal alongwith the intimation of payment to 
the designated authority under sub-section (2) of section 5. 

  (5) Without prejudice to the provisions of sub-sections (2), (3) and (4), the declarant shall furnish an 
undertaking waiving his right, whether direct or indirect, to seek or pursue any remedy or any claim in 
relation to the tax arrear which may otherwise be available to him under any law for the time being in 
force, in equity, under statute or under any agreement entered into by India with any country or territory 
outside India whether for protection of investment or otherwise and the undertaking shall be made in such 
form and manner as may be prescribed. 

  (6) The declaration under sub-section (1) shall be presumed never to have been made if,— 

     (a) any material particular furnished in the declaration is found to be false at any stage; 

     (b) the declarant violates any of the conditions referred to in this Act; 

     (c) the declarant acts in any manner which is not in accordance with the undertaking given by him 
under sub-section (5), 
and in such cases, all the proceedings and claims which were withdrawn under section 4 and all the 
consequences under the Income-tax Act against the declarant shall be deemed to have been revived. 

  (7) No appellate forum or arbitrator, conciliator or mediator shall proceed to decide any issue relating 
to  the  tax  arrear  mentioned  in  the  declaration  in  respect  of  which  an  order  has  been  made  under 
sub-section  (1)  of  section  5  by  the  designated  authority  or  the  payment  of  sum  determined  under  that 
section. 

5. **Time and manner of payment.**—(1)  The  designated  authority  shall,  within  a  period  of  fifteen 
days from the date of receipt of the declaration, by order, determine the amount payable by the declarant 
in accordance with the provisions of this Act and grant a certificate to the declarant containing particulars 
of the tax arrear and the amount payable after such determination, in such form as may be prescribed. 

  (2) The  declarant shall  pay  the  amount  determined  under  sub-section (1)  within  fifteen  days  of  the 
date of receipt of the certificate and intimate the details of such payment to the designated authority in the 
prescribed form and thereupon the designated authority shall pass an order stating that the declarant has 
paid the amount. 

  (3) Every order passed under sub-section (1), determining the amount payable under this Act, shall be 
conclusive as to the matters stated therein and no matter covered by such order shall be reopened in any 
other proceeding under the Income-tax Act or under any other law for the time being in force or under 
any agreement, whether for protection of investment or otherwise, entered into by  India with any other 
country or territory outside India. 

*Explanation.*—For the removal of doubts, it is hereby clarified that making a declaration under this 
Act shall not amount to conceding the tax position and it shall not be lawful for the income-tax authority 
or  the  declarant  being  a  party  in  appeal  or  writ  petition  or  special  leave  petition  to  contend  that  the 
declarant or the income-tax authority, as the case may be, has acquiesced in the decision on the disputed 
issue by settling the dispute. 

6. **Immunity  from  initiation  of  proceedings  in  respect  of  offence  and  imposition  of  penalty  in 
certain cases.**—Subject  to  the  provisions  of  section  5,  the  designated  authority  shall  not  institute  any 
proceeding  in  respect  of  an  offence;  or  impose  or  levy  any  penalty;  or  charge  any  interest  under  the 
Income-tax Act in respect of tax arrear. 

7. **No refund of amount paid.**—Any amount paid in pursuance of a declaration made under section 4 
shall not be refundable under any circumstances. 

*Explanation.*—For the removal of doubts, it is hereby clarified that where the declarant had, before 
filing  the  declaration  under  sub-section  (1)  of  section  4,  paid  any  amount  under  the  Income-tax  Act  in 
respect of his tax arrear which exceeds the amount payable under section 3, he shall be entitled to a refund 
of such excess amount, but shall not be entitled to interest on such excess amount under section 244A of 
the Income-tax Act. 

8. **No  benefit,  concession  or  immunity  to  declarant.**—Save  as  otherwise  expressly  provided  in 
sub-section (3) of section 5 or section 6, nothing contained  in this Act shall be construed as conferring 
any benefit, concession or immunity on the declarant in any proceedings other than those in relation to 
which the declaration has been made. 

9. **Act not to apply in certain cases.**—The provisions of this Act shall not apply— 

  (a) in respect of tax arrear,— 

     (i) relating  to  an  assessment  year  in  respect  of  which  an  assessment  has  been  made  under 
sub-section (3) of section 143 or section 144 or section 153A or section 153C of the Income-tax 
Act on the basis of search initiated under section 132 or section 132A of the Income-tax Act, if 
the amount of disputed tax exceeds five crore rupees; 

     (ii) relating to an assessment year in respect of which prosecution has been instituted on or 
before the date of filing of declaration; 

     (iii) relating  to  any  undisclosed  income  from  a  source  located  outside  India  or  undisclosed 
asset located outside India; 

     (iv) relating  to  an  assessment  or  reassessment  made  on  the  basis  of  information  received 
under an agreement referred to in section 90 or section 90A of the Income-tax Act, if it relates to 
any tax arrear; 

  (b) to any person in respect of whom an order of detention has been made under the provisions of 
the  Conservation  of  Foreign  Exchange  and  Prevention  of  Smuggling  Activities  Act,  1974  (52  of 
1974) on or before the filing of declaration: 

Provided that— 

     (i) such order of detention, being an order to which the provisions of section 9 or section 12A 
of  the  said  Act  do  not  apply,  has  not  been  revoked  on  the  report  of  the  Advisory  Board  under 
section 8 of the said Act or before the receipt of the report of the Advisory Board; or 

     (ii) such order of detention, being an order to which the provisions of section 9 of the said Act 
apply, has not been revoked before the expiry of the time for, or on the basis of, the review under 
sub-section (3)  of section 9,  or  on the report of the Advisory  Board  under  section  8, read  with 
sub-section (2) of section 9, of the said Act; or 

     (iii) such order of detention, being an order to which the provisions of section 12A of the said 
Act  apply,  has  not  been  revoked  before  the  expiry  of  the  time  for,  or  on  the  basis  of,  the  first 
review under sub-section (3) of that section, or on the basis of the report of the Advisory Board 
under section 8, read with sub-section (6) of section 12A, of the said Act; or 

     (iv) such order of detention has not been set aside by a court of competent jurisdiction; 

  (c) to any person in respect of whom prosecution for any offence punishable under the provisions 
of the Unlawful Activities (Prevention) Act, 1967 (37 of 1967), the Narcotic Drugs and Psychotropic 
Substances  Act,  1985  (61  of  1985),  the  Prevention  of  Corruption  Act,  1988  (49  of  1988),  the 
Prevention  of  Money  Laundering  Act,  2002  (15  of  2003),  the  Prohibition  of  Benami  Property 
Transactions Act, 1988 (45 of 1988) has been instituted on or before the filing of the declaration or 
such person has been convicted of any such offence punishable under any of those Acts; 

  (d) to any person in respect of whom prosecution has been initiated by an Income-tax authority 
for  any  offence  punishable  under  the  provisions  of  the  Indian  Penal  Code  (45  of  1860)  or  for  the 
purpose of enforcement of any civil liability under any law for the time being in force, on or before 
the filing of the declaration or such person has been convicted of any such offence consequent to the 
prosecution initiated by an Income tax authority; 

  (e) to  any  person  notified  under  section  3  of  the  Special  Court  (Trial  of  Offences  Relating  to 
Transactions in Securities) Act, 1992 (27 of 1992) on or before the filing of declaration. 

10. **Power of Board to issue directions, etc.**—(1) The Central Board of Direct Taxes may, from time 
to time, issue such directions or orders to the income-tax authorities, as it may deem fit: 

  Provided that no direction or order shall be issued so as to require any designated authority to dispose 
of a particular case in a particular manner. 

  (2) Without  prejudice  to  the  generality  of  the  foregoing  power,  the  said  Board  may,  if  it  considers 
necessary or expedient so to do, for the purpose of this Act, including collection of revenue, issue from 
time  to  time,  general  or  special  orders  in  respect  of  any  class  of  cases,  setting  forth  directions  or 
instructions as to the guidelines, principles or procedures to be followed by the authorities in any work 
relating to this Act, including collection of revenue and issue such order, if the Board is of the opinion 
that it is necessary in the public interest so to do. 

11. **Power to remove difficulties.**—(1)  If  any  difficulty  arises  in  giving  effect to  the  provisions  of 
this Act, the Central Government may, by order, not inconsistent with the provisions of this Act, remove 
the difficulty: 

  Provided that no such order shall be made after the expiry of a period of two years from the date on 
which the provisions of this Act come into force. 

  (2) Every order made under sub-section (1) shall, as soon as may be after it is made, be laid before 
each House of Parliament. 

12. **Power to make rules.**—(1) The Central Government may, by notification in the Official Gazette, 
make rules for carrying out the provisions of this Act. 

  (2) Without prejudice to the generality of the foregoing power, such rules may provide for all or any 
of the following matters, namely:— 

     (a) the  form  in  which  a  declaration  may  be  made,  and  the  manner  of  its  verification  under 
section 4; 

     (b) the  form  and  manner  in  which  declarant  shall  furnish  undertaking  under  sub-section  (5)  of 
section 4; 

     (c) the form in which certificate shall be granted under sub-section (1) of section 5; 

     (d) the form in which payment shall be intimated under sub-section (2) of section 5; 

     (e) determination of disputed tax including the manner of set-off in respect of brought forward or 
carry forward of tax credit under section 115JAA or section 115JD of the Income-tax Act or set-off in 
respect of brought forward or carry forward of loss or allowance of depreciation under the provisions 
of the Income-tax Act; 

     (f) the manner of calculating the amount payable under this Act; 

     (g) any other matter which is to be, or may be, prescribed, or in respect of which provision is to 
be made, by rules. 

  (3) Every rule made by the Central Government under this Act shall be laid, as soon as may be after it 
is made, before each House of Parliament, while it is in session, for a total period of thirty days, which 
may be comprised in one session or in two or more successive sessions, and if, before the expiry of the 
session  immediately  following  the  session  or  the  successive  sessions  aforesaid,  both  Houses  agree  in 
making any modification in the rule or both Houses agree that the rule should not be made, the rule shall 
thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that 
any such modification or annulment shall be without prejudice to the validity of anything previously done 
under that rule.